Carlos Fernandes Economist Peter Schiff has said that this new financial crisis is going to be worse than the crisis of 2008. He also mentioned that trying to increase the rate will not do much because the Federal Reserve already made a plan to print more money, known as ‘quantitative easing’, which will counter any other efforts.
Peter Schiff’s Big Warning
Economist and gold enthusiast Peter Schiff talked about the U.S. economy in his recent tweets. He said that back when the government put lots of new rules after the 2008 financial crisis, it was promised that something like this would never happen again. But, according to him, “the reason why had this economic situation in 2008 was due to too much government control, and now this crisis may be even worse.”
An economist said that during this current financial crisis, things are different this time. Usually the dollar goes up when the economy is bad, but now it’s happening in reverse. People think that there will be a lot more inflation than before because of what happened 10 years ago.
Peter Schiff said he saw the 2008 and 2023 financial crises coming because of bad policies from the Federal Reserve. He started warning us about them in 2009, but he wasn’t sure when they would arrive.
The Federal Reserve (the Fed) has announced new policies that are causing their balance sheet to get bigger. This means the Fed’s amount of money is increasing by $300 billion, which could reach a new high before the end of this month. To make matters worse, two banks – Silicon Valley Bank and Signature Bank – have been bailed out by the Fed and U.S. government. Due to all these actions, inflation will become higher and rate hikes won’t matter much.
The economist said:
The Fed has been trying to stop inflation from going too high with a combination of strategies, like increasing the rates and reducing money supply (known as ‘QT’). But now, the Fed has changed their approach and are putting more money in circulation (refered-to as ‘QE’), which should cause inflation to go up. As QE basically counteracts charge increases, raising the charges will not help at this stage.
Peter Schiff believes that the only way to get near the Federal Reserve’s goal of 2% inflation is to have an even worse economic crisis than 2008 and not bail out any banks or their customers. He says that because recent bailouts of big banks have happened, America has given up on reaching its target for inflation. Do you agree with him? Tell us in the comments section below!
